Contingent relief measures to aid businesses

The COVID-19 outbreak in China is posing challenges to business operations in general. The Chinese authorities, at central and local levels, have rolled out contingent relief measures to aid Chinese businesses and we have summarised the key measures below for your information:

Tax reliefs

China State Administration of Taxation (SAT) issued details of preferential tax treatment during the COVID-19 period:

Individual Income Tax (IIT) exemption is granted to employees who receive epidemic-control medical items (excluding cash);
The filing deadline for the 2019 annual EIT filing and annual IIT filing is expected to be extended. However, we are still waiting for final announcement from China SAT.

Immigration benefits

China National Immigration Administration (NIA) and State Administration of Foreign Experts Affairs (SAFEA) has issued and implemented the following measures in consideration of COVID-19:

SAFEA has temporarily cancelled the restriction of submitting the work permit extension application 30 days before the expiration as of February 2020. The applicant only needs to submit the extension application on-line before its expiration;
The visa/residence permit granted to foreign individuals who are engaged in innovation, entrepreneurship work or scientific research can obtain a two-month extension automatically;

Social security exemption

100% or 50% exemption of employer’s social security contributions for no more than 6 months starting from February 2020. The exemption amount depends on the enterprise’s scale and location.

Labour law and remuneration protection for employees

Relevant measurements on protecting employees’ rights during the COVID-19 outbreak are listed as below:

For employees who have been infected with COVID-19 or are in quarantine and are unable to work as usual, they should still receive their total remuneration from employers during this period;
It will be illegal for employers to terminate employment relationships with employees who have contracted COVID-19 or are in quarantine.

Rebecca Chen
rebecca.chen@bdo.com.cn